Feds Send California’s Legal Pot Dispensaries Up In Smoke.


    Medical marijuana’s days may be numbered.  With a true double whammy, the IRS and federal prosecutors are both using weed killer.  California’s federal prosecutorsannounced an aggressive statewide effort to shut down dozens of pot dispensaries.  SeeFederal Prosecutors Target California’s Marijuana Industry.  If that’s not enough, then there’s the IRS. Legal medical marijuana dispensaries have tax problems and they’re getting worse.  Harborside Health Center alone has a $2.5M tax bill.  Dispensaries are slapped with IRS tax bills, taxed on gross income, not net!  That means no deductions for rent, telephone, advertising, wages, you name it.  Talk about seizure! California and 15 other states recognize medicinal marijuana and allow its sale.  But since federal law has not conformed, the drug law mismatchdirectly impacts taxes.  The IRS claims to only be the messenger, tellingHarborside Health Center it can’t deduct its expenses. The culprit is the tax code, since Section 280E disallows any business deductions—no matter how legitimate—incurred in trafficking in controlled substances.  What’s controlled?  Federal